Data for Helwany Company are presented in P12-7A

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*P12-8A Data for Helwany Company are presented in P12-7A. Further analysis reveals
the following.

1. Accounts payable pertain to merchandise suppliers.

2. All operating expenses except for depreciation were paid in cash.

3. All depreciation expense is in the selling expense category.

4. All sales and purchases are on account.

Instructions

(a) Prepare a statement of cash flows for Helwany Company using the direct method.

(b) Compute these cash-based measures:

(1) Current cash debt coverage ratio.

(2) Cash debt coverage ratio.

(3) Free cash flow.

data from P12-7A

HELWANY COMPANY
Comparative Balance Sheets
December 31

Assets 2012 2011
Cash $ 35,000 $ 20,000
Accounts receivable 20,000 14,000
Inventory 28,000 20,000
Property, plant, and equipment 60,000 78,000
Accumulated depreciation (32,000) (24,000)
Total $111,000 $108,000

and so on ....